How to use Enveloppes in Sentient Trader

Sentient has soon a new feature available in the next version David will release : Hurst Enveloppes

Hurst Enveloppes are de facto the Backbone of Hurst analysis and tools.

Hurst Bands or Dominancy Enveloppes are the FIRST tool he described in Profit Magic

  • before the crossing of Centered Moving Averages
  • before the use of Future Line of Demarcation (FLD)

Hurst in Profit Magic uses Enveloppes to :

  • give additional visibility to price movement on a chart
  • to identify cycles
  • to draw and understand what is a Valid Trend Line
  • to generate a manual Phasing Analysis
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Since I work with the new beta version of ST (since yesterday) my confidence in HOW ST works and HOW ST “decides” has strengthened a lot.

Look at the above chart: the top of the Forecasting Zone in Red is at the estimated level of the Upper Boundary of the Enveloppe 256 TU (Time Unit) here trading day.

And the Low of the 2 nd Forecasting Zone in Green is at the estimated level of the Lower boundary of the Enveloppe 256 TU.

Which means that both systems give almost exactly the same result about the probable maximum expected price move using 2 different and totally independent methodologies.

I find this fact great.

Let’s start with a raw chart . Here the financial instrument is First Solar (FSLR).Data are provided by YAHOO

you just click on the Enveloppe Settings

using the default settings you get the above chart - not really useful

To have a useful graph we need to change the parameters used to build the Enveloppes.

How ? 2 options

What says the methodology ?

If you look at the chart you see that First Solar price fluctuates between 10 and 75.
So price fluctuates in the " Fractal of Price " - (0-100)
Price Octave or Vibration is 12,5 (100 /8)

Enveloppe 256 TU (Time Unit) depth is 2 Octaves - plus and minus the Central Moving Average 256

Enveloppe 256 depth = 2 x 12, 5 = 25
Enveloppe 128 depth is the half of the depth of Enveloppe 256 = 25 / 2 = 12,5
Enveloppe 32 depth is the half of Enveloppe 128 = 12,5 / 2 = 6,25

According to this calculation we enter these parameters into the Enveloppe settings

and we get this chart :slight_smile:

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the second option is to use what I call the “operative Fractal of Price” (my jargon !)

as price fluctuates between 0 and 75 we will say the “operative fractal of Price” is (0-75)

Octave or Vibration is 75 / 8 = 9,375

Enveloppe 256 depth is 2 x 9,375 = 18,75
Enveloppe 128 = 18,75 / 2 = 9,375
Enveloppe 32 = 9,375 /2 = 4,6875

or if you are lazy or not good in mental calculation you can use 80

80 / 8 = 10

Enveloppe 256 depth is 2 x 10 = 20
Enveloppe 128 = 20 / 2 = 10
Enveloppe 32 =10 /2 = 10

and you get this chart :slight_smile:

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I modified the color parameters to recognize at first sight the Enveloppes.

I always use the same colors

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See how you can draw an Ascending Valid Trend Line (VTL) between 2 Lows of the same nature, degree , order. (54 Months Nominal cycle)

See How well Sentient Trader has positionned the 18 months Lows and look at their position on the Envelopes

Look at the various B3 Lows (B3 = Bottom 3 = means that Price has succesively broken or touched the Lower Boundary of the 3 Envelopes)

See how Sentient Trader Forecasting Zones in Red and Green are positionned within the 128 TU Enveloppe.

This means that :slight_smile:

a) Enveloppe 256 and 128 are “turning” changing directions from down to flat , neutral
b) that now Price fluctuates within a probably flat 128 TU Enveloppe -
c) as the previous downtrend seems ended , Price should not reach the Lower Boundary of the 256 TU Enveloppe

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Hi Alain. C’est génial.
I have a question.
Do you think the enveloppes could "speak " with some projected targets from zig zag analysis or other techniques? And by doing that project enveloppes into the future?

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Thanks for this Alain, very interesting.

Just to clarify the below point:

Are you saying ST now uses these envelopes (and their implicit settings) to influence the phasing analysis? Or is it independent of the envelope parameters?

Dave

David F.

Not at all. Both analysis are independant. Sentient trader algorithms and way of deciding where to position cycles lows work separetely. And when ST decides to position lows. These Lows coincide most of the time with contact points of Price with Envelopes of various degree, nature, order.

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misu19021950

can you precise what you think.

There are a lot to say about zig-zag analysis . Let’s read Forex Waves from Duane Archer and Jim Bickford

Hi Alain,

Have you ever thought of including an FLD on your envelope charts? The projected crossing of the median lines within each envelope will approximate price crossing the FLD if done properly. The way you calibrate your envelopes, I think the shortest one equals the FLD length two cycles down from the longest one (same as the FLD trading strategy). Regardless of how you do it, this cross identifies the point of maximum price momentum. Using the outer envelope contact points allows you to get into the trade sooner but at the risk of price not behaving as well (I’ve noticed it sometimes bounces off the median line of the envelopes before crossing it).

Curt

Question-what is your lookback when calculating the octave for the envelopes? Is it always the same or do you have to adjust it depending on the chart?

That First Solar is cycling like a champ.

I was referring to the dual analysis that David introduced and that i think is a major step forward.
In the video that John made in October on gold it was obvious how this dual analysis played on the 45 m cycle.
Also the fact that opposite dual cycles eliminate that particular cycle is significant.
Now in the webinar on zigzags David showed how this dual analysis can be used to project zigzag targets of timing and price.
I therefore thought that it might be possible to use this dual analysis zigzag projections of the different cycles to project this on enveloppes targets as well.

Curt to better understand how the "vibration system " which define the depth of the Enveloppes , you need 2 things:

  • some practice
  • simple logic

but basically the “vibration” is always a subdivision of the “octave”. It is why you manipulate always the same numbers.

I will post some examples so that everybody could understand the internal logic

No problem to use FLD with Enveloppes . As it is Sentient Trader you can use ALL tools offered by Sentient Trader.

Anyway I am not very fond of clustering at the same time all tools on the same workspace because very quickly it becomes very hard to decipher - at least for me

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Hi Alain, the envelopes look great! Thank you for posting the thorough write-up, I should get you to work on our new manual :slight_smile:
@David_F as Alain has already mentioned, the envelopes are an add-on tool, and don’t affect the analysis process

David(s) ! let’s clarify my thoughts.

What David (Hickson) says about an analysis generated by ST is always contaminated by the fact that he is THE conceptor of ST, he built ST from top to bottom and conversely. David knows how ST calculates, what are its limit or limitation. But David is the only one to have such an extensive knowledge of ST.

I remember the time when David developped the Hurst Trader program and explained us the various options he had , and why he choosed this option and not this one . It was terrific and intellectually very stimulating.

So i am just a dumb user ! :grin: I do not understand how ST works most of the time !

I assume nobody here is able to explain precisely how are calculated the Forecasting Zones (green and red).

But as the Enveloppe Triad linked to the “vibration” methodology which determines the operative depth of the 3 Enveloppes concurs in its conclusions about the maximum amplitude of the forecasted Up and Down Price Movements,(the Red and Green Zone) it strenghthens my confidence in the results generated by what is for me a “black box”.

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